Mendocino County retirement tier decision tabled

The Mendocino County Board of Supervisors on Tuesday tabled a decision about how to restructure its retirement system, following advice from county CEO Carmel Angelo to take enough time to carefully consider the options.

The board meets again Dec. 11, and on Tuesday put off its decision until then. At that time, the board will consider adopting a new retirement benefit level, or tier, for employees hired after Jan. 1, 2013, which county administration hopes will save the county money and make the system sustainable.

"This decision that the board makes in December ... will impact Mendocino County for the next 20 to 50 years," Angelo said.

The new tier will be effective in January whether the county takes action or not under the Public Employees Pension Reform Act (PEPRA), which becomes effective then after Gov. Jerry Brown in September signed the legislation enacting it. The Board of Supervisors must decide how it wants to configure those retirement benefits, and those for existing employees.

A working group including the county Executive Office, Human Resources Department, Auditor-Controller, County Counsel, Mendocino County Employees Retirement Association and the county's actuary, the Segal Company, gave the board an overview of PEPRA and outlined the steps the county must take before Jan. 1, 2013.

The new-employee tier -- to be added as an additional level to each of the county's three existing benefit levels -- will mean, among other things, that the county and any new employee will each contribute half of the amount of the benefit. That same 50-50 cost sharing would also go into effect for existing employees in 2018, but the sooner county administration can implement it the more the county will save, Angelo said.

Currently, employees in the "general" retirement tier contribute 45 percent of the benefit, while the county contributes 55 percent, according to Angelo.

The county will need to negotiate the cost-sharing provision with each of the eight bargaining units that represents county employees in order to start getting the savings before 2018.

Ukiah attorney Matt Finnegan spoke to the board Tuesday on behalf of one of those groups, the International Brotherhood of Teamsters, Local 856, which represents about 45 county probation officers and attorneys in the District Attorney's Office, Public Defender's Office and Child Support Services.

He urged the board to adopt the new tier with a Cost-of-Living Adjustment (COLA) provision built in, which would allow the benefit to increase by up to 3 percent every year based on the Consumer Price Index.

Carl Carr, a representative of Service Employees International Union, Local 1021, which represents about 750 county employees, also urged the board to adopt a tier or tiers that include a COLA provision.

That provision is a sticking point, according to Angelo.

"COLA is approximately 25 percent of the costs of our pension fund," Angelo said, noting that the pension system isn't fully funded as it is.

County employees in the "general" tier currently get a retirement benefit that would give them 2 percent of their highest salary at age 57 with a 3-percent COLA. The alternatives the board will decide between in December include a plan that would give them 2.5 percent at age 67 with no COLA or that same formula with a 2-percent COLA under PEPRA requirements; or, under 1937 Act allowances that also comply with PEPRA, either 1.62 percent at age 65 with no COLA or the same formula with a 2-percent COLA.

Public safety employees currently get 3 percent of their salary at age 55 with a 3-percent COLA. The options the board is considering for them include 2.7 percent at age 57 with or without a 2-percent COLA under PEPRA; or 2 percent at age 50 with no COLA.

The county's "Safety Probation" tier employees currently get 2 percent at age 50 with a 3-percent COLA. The options the board will consider for those employees are the same as the options available for public safety employees.

Tiffany Revelle can be reached at udjtr@pacific.net, on Twitter @TiffanyRevelle or at 468-3523.